Businesses, consumers more bullish for Q4

MANILA, Philippines — Businesses and consumers are more optimistic for the fourth quarter, according to the latest surveys conducted by the Bangko Sentral ng Pilipinas (BSP).

Redentor Paolo Alegre Jr., officer-in-charge of the BSP Department of Economic Statistics, said in an online press briefing that the overall business confidence index (CI) for the fourth quarter increased to 56.8 percent from the previous quarter’s 43.7 percent.

“The current-quarter CI has considerably improved since the peak of the COVID-19 effects in the third quarter of 2020, when it registered at -5.3 percent,” Alegre said. 

“However, it has not yet reached its pre-pandemic average level of 41.6 percent and has just been hovering above 30 percent since then,” he said.

Based on the 2024 third quarter Business Expectations Survey (BES), Alegre said the respondents attributed their increased optimism to expectations of higher demand for products and services during the holidays, lower interest rates, easing inflation and better economic conditions. 

For the current quarter, business sentiment remained optimistic as the index inched up to 32.9 percent from 32.1 percent previously. 

He said the decrease in the percentage of pessimists was driven by lower inflation, seasonal uptick in business activities due to the start of the new school term and the pre-holiday inventory stocking by retailers, as well as the expansion of business operations.

For the next 12 months, Alegre said businesses were more upbeat as the confidence index rose to 58 percent from the previous quarter’s 56.5 percent.

The more optimistic outlook for the next 12 months was attributed to expectations of sustained strong demand for products and services, business expansions, lower inflation as well as the launch of new and improved products and services.

Likewise, Alegre reported that Filipino consumers turned optimistic for the fourth quarter as the confidence index stood at 0.7 percent, a turnaround from the -0.4 percent in the previous survey. 

“The respondents attributed their optimism to expectations of higher income, additional sources of income, more available jobs, increase in salary and additional working family members,” he said. 

Consumer sentiment also improved for the current quarter as the confidence index (CI) turned less negative at -15.6 percent from -20.5 percent previously, results of the 2024 third quarter Consumer Expectations Survey (CES) showed.

According to the respondents, their less pessimistic sentiment for the third quarter was due to expectations of higher income and remittances, additional sources of income, permanent employment and more available jobs as well as additional working family members.

Meanwhile, the consumer confidence for the next 12 months was less optimistic as the CI declined to 9.9 percent from 13.5 percent, Alegre said. 

“Respondents attributed their guarded optimism for the next 12 months to the faster increase in the prices of goods and services, fewer available jobs, lower income and perceived pervasiveness of corruption in the government,” he said. 

A total of 1,525 businesses participated in the BES, which was conducted from July 5 to Aug 27. Meanwhile, around 5,335 households were interviewed for the CES from July 1 to 12.